Construction is set to begin on the first stage of a $15 billion city-within-a-city that aims to reshape Manhattan's desolate far West Side, kicking off the largest privately funded office development in the U.S. since the economic downturn. New York developer Related Cos. has assembled a new group of financial backers and said it plans to break ground in November on the initial 46-story office tower of the 26-acre Hudson Yards project, a sign that the dormant market for U.S. commercial development is showing early signs of life. "This will be the Rockefeller Center—the heart of the city—for the 21st century," said Stephen Ross, Related's chairman. "We are going to build a truly world-class site."

Lenders including Bank of America Corp. have tentatively committed to finance a construction loan of roughly $400 million for the initial 1.7-million-square-foot tower at the Hudson Yards site, according to real-estate executives briefed on the plans. In addition, a Middle Eastern sovereign-wealth fund agreed to invest with Related and its Canadian pension plan-backed partner, Oxford Properties Group, on the $1.2 billion building, the executives said.

Related is trying to finalize deals with its partners by year-end. The talks are far enough advanced, according to Related and others involved in the project, that the company feels comfortable starting on the first building, which it hopes to finish by 2015.

For future phases, the costs grow and the schedule may again be thrown off by the economy. Related needs to build an $800 million platform over half the rail yards for the second phase, and another platform for the third phase. Related would start the second phase if it secures a large tenant. Mr. Ross said the company is "far along" in talks with such companies. Last year, the developer struck a deal with handbag maker Coach Inc. to take office space in more than one-third of the first tower. Still, it was unclear at the time whether Related would be able to start work as planned, given that since the downturn, construction lending has been slow for all building except rental apartments.

Since then, Related and its advisers at CBRE Group Inc. have attracted more tenants. This month, the chairman of cosmetics company L'Oréal gave his blessing to a plan to move the company's Manhattan offices to the tower, said executives familiar with the decision. L'Oréal is negotiating with Related for a lease for more than 400,000 square feet. German software giant SAP AG is in talks to take more than 100,000 square feet, those executives said. Representatives of both companies declined to comment.

Related Cos. is trying to change the terms of its long-awaited deal with the MTA at Hudson Yards, even as the developer is closing in on a second major office lease for the first tower it plans to build. Terms call for Related to close first on a deal with the MTA for the eastern yard — between 10th and 11th avenues — followed by closing on the western portion one year later.

But while Related and financial partner Oxford Properties Group can do preliminary excavation at the site, they can’t actually start building until the MTA lease is signed. Yesterday, Related officials, who didn’t wish to be named, said they hoped to wrap it up by year’s end, while denying they wanted to change financial or contractual terms.

Meanwhile, sources said German multinational software giant SAP is in advanced talks for a large block of space at the Coach tower. It would be a second major leasing milestone for the Kohn Pedersen Fox-designed skyscraper.

SAP last summer overtook Siemens as Germany’s most valuable publicly traded company, with a $75 billion market valuation. Sources said Related and SAP are moving toward a term sheet, an agreement on major economic terms that usually, but not always, results in a signed lease. SAP would have less than Coach’s 750,000-square-foot share of the 1.7-million-square-foot tower. But it would be a significant lease of several hundred thousand square feet, sources said.

__________________NEW YORK. World's capital.

“Office buildings are our factories – whether for tech, creative or traditional industries we must continue to grow our modern factories to create new jobs,” said United States Senator Chuck Schumer.

TAKE a deep breath at the rail yards on the West Side of Manhattan. If you don’t smell leather, you’re not thinking like Reed Krakoff. Mr. Krakoff is the president and executive creative director of Coach Inc., and has been credited with leading the leather-goods brand from functionality to fashionability. Now, he’s shepherding the bag-and-wallet behemoth to its future home at Hudson Yards, the multibillion-dollar real estate Shangri-La scheduled to break ground this fall.

“It is a rarity for a brand, a city and an architectural project to come together,” Mr. Krakoff said the other day, dressed in his trademark chunky glasses and Turnbull & Asser button-down shirt. He was standing in a conference room cluttered with paper models at Kohn Pedersen Fox, the architectural firm that is leading the design of the Coach tower. But that’s not to say that Mr. Krakoff is not involved in every minute design decision, down to the oak floors that will be transferred to the new building from Coach’s original factory space, on West 34th Street. For more than a year, Mr. Krakoff and an in-house architect at Coach, Louis Minuto, have been meeting with William Pedersen, a principal at the renowned architecture firm, tailoring the building to Coach’s needs. Though Mr. Krakoff and Mr. Pedersen have contrasting personalities (detached aesthete versus nutty professor), their visions for the tower intertwine.

But it wasn’t always so. The first meeting last summer was “rough,” Mr. Krakoff said. From the nervous laughter of the architects nearby, that was clearly an understatement. “It was in no way critical of the architecture,” he clarified. “It just wasn’t our architecture.”

“If it’s fair to say, you had a concern about being in a large, anonymous office building,” said Mr. Pedersen, who had just been showing him the latest renderings. What Mr. Krakoff craved was a campus, and an “openness” that could bleed out into the city. In other words, Coach’s headquarters shouldn’t look like a bank’s.

After that infamous meeting, as Mr. Pedersen termed it, Mr. Krakoff invited him, Mr. Minuto and Marianne Kwok, the tower’s senior designer, to his East Hampton estate, once a summer home of the Bouvier family. His wife, Delphine Krakoff, made them lunch: steak, tomato salad, and corn on the cob. “We got to talking about our backgrounds,” Mr. Krakoff recalled. “We all actually grew up playing hockey.” Mr. Pedersen had played at the University of Minnesota with Herb Brooks, who went on to become an Olympic coach. Ms. Kwok never played, but, she said, “I grew up in Canada, so I understood.”

The result was better communication and a rejiggered design, including the addition of a glass atrium that could function as a social hub. “It broke the scale down,” Mr. Krakoff said, meaning that it would help to link the 46-story skyscraper with the pedestrians below. The architects also tied the tower more closely with the High Line. An offshoot of the former railway, the 10th Avenue Spur, will run alongside the lobby beneath a glass veil, where pedestrians can gawk at Coach employees heading to and from work.

Mr. Krakoff also oversees the design of several dozen Coach stores a year. “Most stores we work on are renovations,” he said. The tower was an opportunity to create something from scratch, which was a challenge he clearly relished.

__________________NEW YORK. World's capital.

“Office buildings are our factories – whether for tech, creative or traditional industries we must continue to grow our modern factories to create new jobs,” said United States Senator Chuck Schumer.

Good idea to start a separate thread. Although I'm a bit disappointed the Coach Tower lost its supertall status I still think it's still pretty tall and luckily the design did stay the same.

Yeah, this one will be going under construction soon. It's lost about 141 ft. but it will still be taller than most Manhattan skyscrapers - all but the 900 footers and supertalls. It's still more than what is going up in a lot of places, so we should be thankful. I prefer the extra height of course, but on the brighter side the north tower has continued to climb higher.

__________________NEW YORK. World's capital.

“Office buildings are our factories – whether for tech, creative or traditional industries we must continue to grow our modern factories to create new jobs,” said United States Senator Chuck Schumer.

Facts
Official Name Hudson Yards South Tower
Complex Name Hudson Yards
Type building
Status Proposed
Country United States
State New York
City New York City
Street Address 10th Avenue and West 30th Street
Building Function office
Proposed 2011
Start of Construction 2013
Completion 2015

That's ridiculous. In the first phase of this development alone there will be two supertalls. Everything in this city can't be a supertall, nor should it be. The best skylines have a variety. Also, 876 ft is nothing to laugh at.

__________________NEW YORK. World's capital.

“Office buildings are our factories – whether for tech, creative or traditional industries we must continue to grow our modern factories to create new jobs,” said United States Senator Chuck Schumer.

I wonder if they shortened this tower because they are adding an observation deck and other entertainment facilities at 1100 feet on the second tower?

It went from a 1.7 msf building to a 2msf building, back to 1.7 msf, while the north tower remains the same 2.5 msf. It probably has more to do with getting construction and financing, as they have to get the building started by the end of the year for Coach. They probably wouldn't be able to start the larger building as soon. Just a theory. But the tower seems on the road to filling up fast.

Quote:

Since then, Related and its advisers at CBRE Group Inc. have attracted more tenants. This month, the chairman of cosmetics company L'Oréal gave his blessing to a plan to move the company's Manhattan offices to the tower, said executives familiar with the decision. L'Oréal is negotiating with Related for a lease for more than 400,000 square feet. German software giant SAP AG is in talks to take more than 100,000 square feet.

Quote:

Sources said Related and SAP are moving toward a term sheet, an agreement on major economic terms that usually, but not always, results in a signed lease. SAP would have less than Coach’s 750,000-square-foot share of the 1.7-million-square-foot tower. But it would be a significant lease of several hundred thousand square feet, sources said.

After Coach and L'Oréal, that would leave roughly 500,000 sf for SAP and anyone else who wants to fit in or 2.5 msf in the north tower for those who need large amounts of space.

It's a 3 segment tower, with Coach taking the lower segment.

__________________NEW YORK. World's capital.

“Office buildings are our factories – whether for tech, creative or traditional industries we must continue to grow our modern factories to create new jobs,” said United States Senator Chuck Schumer.

So with Coach, L'Oreal and SAP, this tower may be close to, if not definitely, fully leased...and it's only barely starting construction. Remarkable, simply remarkable...

It's amazing at the speed at which tenants are filling this tower, considering it's still a vast, underdeveloped area. But that's also good news for other towers - both on the west side and downtown - because none of the major players looking for space have made decisions yet. Anyone else looking to Related's development will have to go to the north tower. Extell's One Hudson Yards is an option, as is obviously Silverstein's WTC towers and Brookfield's Manhattan West.

__________________NEW YORK. World's capital.

“Office buildings are our factories – whether for tech, creative or traditional industries we must continue to grow our modern factories to create new jobs,” said United States Senator Chuck Schumer.

I'm disappointed with the reduction in height. But anyway it is a great tower, and it will be interesting to see this building grow.

I don't know if it was a strategy by Related or if the space was reduced a bit when Coach was the only tenant on board. Either way, it looks like it's filling up before it's even built. The tower seems flexible that way, and though I don't expect them to increase the size again, it wouldn't shock me if they did.

__________________NEW YORK. World's capital.

“Office buildings are our factories – whether for tech, creative or traditional industries we must continue to grow our modern factories to create new jobs,” said United States Senator Chuck Schumer.

The height reduction might have been a strategic move to allow for demand to spill over into the other tower - which it undoubtedly will do. You have three big name tenants that have committed to the far West Side - that should be the leading talking point. I have conviction that this with ignite a monkey-see-monkey-do phenomenon in the area, particularly with Time Warner being among the next to make a move. Media, technology and consumer staples companies will lead the charge into the far West Side, as demonstrated by what we have already witnessed.

__________________"I'm going there, but I like it here wherever it is.."